San Diego jobless rate jumps to 11 percent

Despite a seasonal increase in hiring, the unemployment rate in San Diego County rose to 11 percent last month, because the creation of new jobs failed to keep pace with the number of workers entering the job market.

Statewide, the unemployment rate hit a modern record of 12.6 percent, though it rose only a fraction over February, according to data released Friday by the California Employment Development Department. California nonfarm payroll jobs increased by 4,200. It was the third consecutive month that the state added jobs, gaining 32,400 jobs so far this year.

In San Diego County between February and March, employers added 5,500 jobs. Most of that hiring was seasonal. Hotels, restaurants and retailers added 2,500 jobs, largely related to spring break, while public and private schools added 2,900, tied to the beginning of school semesters.

In addition, there were 700 new temporary jobs – which economists say could be a sign of future growth for permanent jobs – as well as 100 jobs in finance and insurance.

Only two major industries declined during the month: telecommunications, which lost 200 jobs, and construction, which lost 100.

Despite the job growth, unemployment rose from a revised 10.7 percent in February to 11 percent in March as 11,800 new workers entered the labor market, more than double the amount of jobs that were created.

Economists say that it is typical for unemployment numbers to rise in the early stages of an economic recovery, since workers who were previously too discouraged to look for work return to the labor market.

One encouraging sign in the San Diego job report was a reduction in year-to-year job losses. Since March 2009, the county lost 35,100 jobs, or 2.8 percent of the workforce. But that is an improvement over previous months Just last month, the year-to-year gap was 39,000 jobs and when employment was at its nadir last spring, it topped 80,000, according to recently revised figures from the EDD.

Statewide, there were 362,000 more people jobless than a year ago.

California’s jobless rate grew from 12.5 percent in February after holding steady for a month. The rate was 10.6 percent in March 2009.

Howard Roth, chief economist for the state Department of Finance, said the unemployment rate appears to be at or near its peak.

It was the first time since mid-2007 that the state saw job gains for three consecutive months. The department previously had reported a job loss in February, but revised those numbers Friday based on new data.

“I think this is for real,” Roth said of the economic rebound. “We’re seeing it in other statistics as well, personal income, taxable sales and housing prices.”

The state lost an average of 115,000 jobs a month in the first quarter of 2009, compared with gains each month this year. There was growth in five of the 11 jobs sectors in March: mining and logging, manufacturing, education, health services and hospitality.

“It’s a sign that people are at least feeling there are jobs, and they can actually look for a job,” said Kevin Callori, an EDD spokesman.

The construction, information, government, financial and professional services sectors lost jobs last month.

Roth expects the state’s unemployment rate to remain high through 2011 in part because more people will start looking for jobs but may not find them right away. He noted the national unemployment rate, which remained unchanged at 9.7 percent in March, was down from its peak of 10.1 percent in October.

Gov. Arnold Schwarzenegger said he is encouraged but said in a statement that the state needs to focus on training employees and giving employers incentives to hire them.

Michigan leads the nation with a 14.1 percent unemployment rate, followed by Nevada at 13.4 percent.

California was tied with Rhode Island for the third-highest jobless rate.